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…group moves ahead of regulatory deadline with strengthened capital base

By Gloria Ikibah

Sterling Financial Holdings Company Plc has confirmed that its two principal banking subsidiaries, Sterling Bank and The Alternative Bank, have been fully recapitalised in line with revised minimum capital thresholds set by the Central Bank of Nigeria.

Final regulatory clearances were secured in January 2026, although the bulk of the capital-raising activity had been concluded between December 2024 and October 2025. The move places the Group comfortably ahead of the industry’s 2026 compliance deadline and positions it strongly for its next phase of expansion.

The recapitalisation drive began in December 2024 with a N75 billion private placement, which generated N73.86 billion in net proceeds. Of that sum, N68.8 billion was channelled into Sterling Bank, while N5 billion was directed to The Alternative Bank to reinforce their respective capital foundations.

This was followed by a N28.79 billion rights issue that attracted subscriptions exceeding the offer size by N10.29 billion. Subsequent regulatory approval in May 2025 allowed for the allotment of N26.639 billion under the rights issue. The surplus demand was later restructured as a private placement, enabling The Alternative Bank to satisfy capital requirements applicable to nationally licensed non-interest banks.

Further strengthening came in October 2025 through an N88 billion public offer, which also recorded excess demand. The Central Bank approved N96.69 billion for recognition as additional capital, while the Securities and Exchange Commission endorsed the allotment of 13.8 billion shares under the offer.

In total, N153 billion was injected into the two subsidiaries, bringing both institutions into full compliance with the revised capital regime and enhancing the Group’s capacity to support economic activity while maintaining financial stability.

Group Chief Executive, Yemi Odubiyi indicated that the strengthened capital base provides a firmer platform for sustainable growth and improved resilience across the organisation.

He noted that fully capitalising both Sterling Bank and The Alternative Bank reinforces the Group’s dual-bank structure and its ability to serve conventional and non-interest segments.

He said: “This exercise goes beyond regulatory compliance. It positions us to expand credit responsibly, accelerate innovation, and provide sustained support to businesses and households, while maintaining the discipline required in a challenging operating environment.
 
“Our structure enables efficient deployment of capital across complementary markets and positions us to respond with agility to evolving customer needs,” he said.

He said that strong investor participation across the capital programmes reflects confidence in the Group’s governance and long-term strategy.
 
The Group Chief Executive added that the strengthened balance sheet provides a platform for the Group’s next phase of growth.

“We are entering this phase from a position of significant financial strength, with the capacity to scale non-banking businesses, deepen digital capabilities, and pursue disciplined expansion opportunities while delivering sustainable value for shareholders,” Odubiyi said.
 
Alongside the reinforcement of its banking arms, Sterling Financial Holdings Company Plc is preparing to commit a further N10 billion to SterlingFI Wealth Management Limited, its asset management subsidiary. The planned injection aligns with the updated minimum capital thresholds for capital market operators introduced by the Securities and Exchange Commission in January 2026. The additional funding is intended to facilitate the commencement of full-scale operations while advancing the Group’s strategy to broaden its income base.

Confirmation of the recapitalisation comes amid a period of robust financial performance. In its interim results for the 2025 financial year, the Group recorded a 99 per cent rise in profit before tax, while gross earnings increased by 46 per cent compared with the previous year. Growth was recorded across both interest and non-interest income lines, reflecting a more balanced earnings mix.

Total assets approached N4 trillion, customer deposits rose by 18 per cent, and shareholders’ funds climbed by 39 per cent to N424 billion, underscoring sustained profitability and continued balance sheet expansion.

Operational efficiency also improved, with the cost-to-income ratio narrowing to 63 per cent from 72 per cent in 2024. Continued investment in digital infrastructure and operational systems across its banking and non-banking businesses contributed to stronger earnings resilience, improved service delivery and the capacity to manage higher transaction volumes while maintaining disciplined risk oversight.

With its capital position reinforced and additional headroom for investment, Sterling HoldCo is now positioned to pursue measured expansion, strengthen its non-banking portfolio and accelerate efforts to diversify revenue streams across the Group.